Media Giant Looks to Back Out of Consumer Friendly Conditions
PITTSBURGH, April 3, 2008-The American Cable Association (ACA) took exception today to News Corp.’s attempts to back out of conditions established by the FCC and agreed to by the media giant as part of its purchase of DIRECTV in 2004.
The consumer-friendly conditions imposed on News Corp. regarding its Fox television stations and Fox sports networks should remain in place through 2010 as originally set forth by the Commission in its 2004 News Corp-Hughes Order, and as agreed to by News Corp, said Matthew M. Polka, ACA President and CEO.
In February 2008, News Corp. sold its holdings in the satellite television provider, along with three regional sports networks and $550 million in cash to Liberty Media’s holding in News Corp.
“The time for News Corp. to have requested modification of their conditions was at the time that they sought FCC approval of their sale of DIRECTV,” Polka said. “When News Corp. acquired DIRECTV in 2004, the company voluntarily agreed to abide by these consumer-friendly conditions through 2010 without any stipulation that they would be allowed to escape by selling DIRECTV. The fact that they have now sold DIRECTV does not eliminate the benefits that News Corp. has received as a vertically integrated distributor for the last four years. The conditions should remain in place for its term.”
If the agreed upon conditions for News Corp. were lifted, small cable operators and their customers will be forced to pay more money for the same content, because News Corp. will exercise unconstrained market power over smaller distributors – again. The public will also experience a disruption in service as News Corp. withdraws broadcast channels and regional sports networks to squeeze higher license fees.
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About the American Cable Association
Based in Pittsburgh, the American Cable Association is a trade organization representing 1,100 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA’s members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit www.americancable.org.